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Date U.S. Dollar per Canadian Dollar September 1, Year 1 $0.75 December 31, Year 1 0.73 March 1, Year 2 0.71 Prepare journal entries for
| Date | U.S. Dollar per Canadian Dollar | ||||
| September 1, Year 1 | $0.75 | ||||
| December 31, Year 1 | 0.73 | ||||
| March 1, Year 2 | 0.71 |
| Prepare journal entries for the option fair value hedge and the firm commitment and detail calculation for each journal entry and question. |
| 2-What was the net impact on ABC Company's Year 2 income as a result of this fair value hedge of a firm commitment? |
| 3-What was the net increase or decrease in cash flow from having purchased the foreign currency option to hedge this exposure to foreign exchange risk? |
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To prepare journal entries for the fair value hedge and firm commitment lets first understand the scenario and calculations involved Lets assume ABC C...
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International Accounting
Authors: Timothy Doupnik, Hector Perera
4th edition
77862201, 978-0077760298, 77760298, 978-0077862206
